Proposed conversion of UK business to a REIT
SIRIUS REAL ESTATE LIMITED
(Incorporated in Guernsey)
Company Number: 46442
JSE Share Code: SRE
LSE (GBP) Share Code: SRE
LEI: 213800NURUF5W8QSK566
ISIN Code: GG00B1W3VF54
22 March 2022
Sirius Real Estate Limited
("Sirius Real Estate", "Sirius" or the "Company")
Proposed conversion of UK business to a UK Real Estate Investment Trust ("REIT")
Sirius Real Estate, the leading owner and operator of branded business and industrial parks providing conventional space and flexible workspace in Germany and the UK, announces that it intends to convert its UK business to a UK Real Estate Investment Trust ("REIT") from 1 April 2022.
The proposed REIT conversion follows the Company's UK acquisition of BizSpace in November 2021. By entering the UK REIT regime, the Company will no longer be subject to UK corporation tax on income or gains from its property rental business and will be required to pay 90% or more of its UK property rental business income to shareholders annually, as property income distributions ("PIDS"), which can be satisfied by both cash and SCRIP dividends.
Certain classes of shareholder are eligible to receive gross PIDs however in general PIDs are paid to shareholders after the deduction of withholding tax at the basic rate of income tax (20%). Shareholders not resident in the UK may be entitled to claim a full or partial refund from HMRC where a treaty dividend rate applies.
REIT conversion is not expected to affect the Company's current dividend policy of paying out 65% of annual Funds From Operations ("FFO") and in addition to PIDs, the Company will continue to make distributions derived from its German operations ("non-PIDs"). Non-PIDs will be treated like "normal" dividends paid by non-REIT companies and will not be subject to UK withholding tax.
At the Company's next Annual General Meeting ("AGM"), scheduled for 29 July 2022, approval will be sought for the insertion of new clauses to its Articles of Incorporation ("Articles") in line with UK REIT requirements. Further details on the changes to the Articles and the implications of the REIT conversion will be provided to shareholders ahead of the AGM.
Andrew Coombs, Chief Executive of Sirius Real Estate, commented: "The proposed conversion to a UK REIT is a natural progression following the Company's transformational acquisition of BizSpace in the UK last year, and provides greater comparability to other UK REITs in terms of our FFO and dividend yields for investment purposes."
For further information:
Sirius Real Estate
Andrew Coombs, CEO / Diamuid Kelly, CFO
+49 (0) 30 285 010 110
FTI Consulting (Financial PR)
Richard Sunderland / James McEwan / Talia Jessener
+44 (0) 20 3727 1000
SiriusRealEstate@fticonsulting.com
NOTES TO EDITORS
About Sirius Real Estate
Sirius is a property company listed on the main market and premium segment of the London Stock Exchange and the main board of the JSE Limited. It is a leading operator of branded business parks providing conventional space and flexible workspace in Germany. The Company's purpose is to create and manage optimal workspaces that empower small and medium-sized businesses to grow, evolve and thrive. Sirius seeks to unlock the potential of its people, its properties, and the communities in which it operates, so that together we can create sustainable impact, and long-term financial and social value.
The Company's core strategy is the acquisition of business parks at attractive yields, the integration of these business parks into its network of sites under the Company's own name as well as offering a range of branded products within those sites, and the reconfiguration and upgrade of existing and vacant space to appeal to the local market, through intensive asset management and investment. The Company's strategy aims to deliver attractive returns for shareholders by increasing rental income and improving cost recoveries and capital values, as well as by enhancing those returns through financing its assets on favourable terms. Once sites are mature and net income and values have been optimised, the Company may take the opportunity to refinance the sites to release capital for investment in new sites or consider the disposal of sites in order to recycle equity into assets which present greater opportunity for the asset management skills of the Company's team.
Sirius also has a venture with clients represented by AXA IM Alts. Titanium was formed through the acquisition by AXA IM Alts, on behalf of its clients, from Sirius, of a 65% stake in five business parks across Germany. Sirius retained the remaining 35%. The venture seeks to grow primarily through the acquisition of larger stabilised business park assets and portfolios of assets with strong tenant profiles and occupancy. As well as its equity interest, Sirius acts as operator of the assets in the venture, on a fee basis. Sirius will continue to grow its wholly owned portfolio through acquisitions of more opportunistic assets, where it can capitalise on its asset management expertise to maximise utilisation of the space, grow occupancy and improve quality of the tenants. The strategies have been clearly defined so that the venture does not conflict with Sirius's existing business.
For more information, please visit: www.sirius-real-estate.com
Follow us on LinkedIn at https://www.linkedin.com/company/siriusrealestate/
Follow us on Twitter at @SiriusRE
JSE Sponsor
PSG Capital
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